OpenAI Transitions to For-Profit, Raises $6.6B, Reduces Reliance on Microsoft

Oct 8, 2024, 01:41 PM

OpenAI is transitioning from a non-profit to a for-profit model, as discussed by COO Brad Lightcap. The company aims to evolve its structure to meet growing demands for compute power, particularly for its new o1 model. OpenAI has raised $6.6 billion from investors including Thrive Capital, Microsoft, Nvidia, and SoftBank, which will primarily be used for compute capacity. However, OpenAI is beginning to reduce its reliance on Microsoft data centers, citing Microsoft's slow pace in meeting its needs. The company is securing its own compute capacity and is in discussions with Oracle to build the world's most powerful AI data center. This move is partly driven by Microsoft's cautious approach to investing in large server clusters due to concerns about long-term revenue generation. Additionally, OpenAI's transition includes key personnel changes, such as the departure of CTO Mira Murati. The company is also partnering with Apple and dealing with Microsoft's $13B investment, which requires OpenAI to generate $17.3B in profits.